Oral Answers to Questions

Margot James Excerpts

Tuesday 12th December 2017 Commons Chamber

[Mohammad Yasin (Bedford) (Lab)]

13. What assessment he has made of the effect of the privatisation of Royal Mail on employment standards in the postal industry.

[The Parliamentary Under-Secretary of State for Business, Energy and Industrial Strategy (Margot James)]

Almost all Royal Mail’s 142,000 staff are on permanent contracts and earn above the living wage. Employees own 12% of its shares, and it has been a Times top-50 employer for women for four consecutive years. The Government will protect workers’ rights, ensuring they keep pace with the changing labour market.

[Hugh Gaffney]

Today is postal workers day, and I am sure the House would like to thank all postal workers in Royal Mail and Parcelforce for the good work they do all year round, six days a week, in all kinds of weather across the UK.

Royal Mail was not for sale. Under this Government and privatisation, its employees face worse pay and conditions and attacks on pensions, along with the threat of more job losses. Will the Minister renationalise Royal Mail?

[Margot James]

I heartily agree with the hon. Gentleman’s celebration of our postal workers today. As he says, they will deliver in all weather to 29 million addresses across the country over the festive season. I cannot agree, however, that renationalisation is the answer. Royal Mail is in negotiations with the Communication Workers Union, and progress has been made following mediation by Professor Lynette Harris. I assure the hon. Gentleman that there would be a great loss to the postal workers, who, let us not forget, own 12%—

[Mr Speaker]

Order. I am extremely grateful to the Minister, but we have a lot to get through. We need to be much brisker. Sorry.

[Christian Matheson]

I refer to my entry in the Register of Members’ Financial Interests. As postal workers trudge through the snow this morning, they will have a right to be aggrieved at losing their pensions, while Moya Greene gets paid £1.9 million and gets free flights, paid for by Royal Mail, to Canada. Does the Minister accept that?

[Margot James]

I disagree with the hon. Gentleman. The pension scheme, if left unchanged, would result in virtual bankruptcy for Royal Mail. It would require an injection of £1.3 billion annually, against profitability of approximately £700 million. I think he can do the maths himself.

[Afzal Khan]

Royal Mail is paying out over £200 million in dividends every year to private shareholders. Last year, the chief executive saw her pay increase by 23%. How can the Government stand by a model of ownership that sees postal workers’ pay being frozen and their pensions left unaffordable?

[Margot James]

I understand that Royal Mail’s offer of a pay increase to its workforce is far from frozen. I do not propose to comment much further, however, other than to say that the figures the hon. Gentleman refers to are misleading, because they go way beyond the chief executive’s base salary and include performance-related benefits, which are in line with a position of that stature.

[Mr Speaker]

Order. The Minister may judge that the figures are misleading, but I am sure she would not suggest that the hon. Gentleman would deliberately mislead the House.

[Margot James]

I certainly would not, Mr Speaker.

[Mohammad Yasin]

In the privatised Royal Mail, 500 jobs have been lost while, at the same time, it has dished out close to £700 million in dividends to private shareholders. Is this a record of privatisation the Minister is proud of?

[Margot James]

As I said earlier, Royal Mail contributes £400 million a year to the pension scheme and, since privatisation, has provided access to capital of £1.5 billion and converted losses of £49 million into profits of £700 million. I would say that that was a pretty successful record.

[Andrew Bridgen (North West Leicestershire) (Con)]

Does the Minister agree that, regardless of ownership, Royal Mail needs to continue to modernise and become more efficient, because it operates in an increasingly competitive marketplace?

[Margot James]

My hon. Friend makes a very good point. When Royal Mail was privatised, Amazon was one of Royal Mail’s biggest customers; Amazon is now one of its biggest competitors. So he is absolutely right. More investment in technology and modernisation is required if Royal Mail is to maintain its market position.

[Mr Philip Hollobone (Kettering) (Con)]

The posties in Kettering work extremely hard all year round and do a tremendous job, especially at Christmas. What is the value of the average postal worker’s individual stake in Royal Mail?

[Margot James]

I can confirm to my hon. Friend that the workforce own 12% of Royal Mail, which is a fact that the leadership of the Labour party should consider as it contemplates a round of nationalisation.

[John Cryer (Leyton and Wanstead) (Lab)]

All the evidence is that employment standards in Royal Mail and more widely are being driven down, including with job losses and cuts to pensions. Is the Minister seriously arguing that employment standards today are higher than they were at the point of privatisation?

[Margot James]

The hon. Gentleman should accept that Royal Mail needs to maintain its position in the marketplace. It already provides employment conditions that are the envy of delivery workers employed by its competitors.

[Drew Hendry (Inverness, Nairn, Badenoch and Strathspey) (SNP)]

Royal Mail employs a significant number of people in the north of Scotland. Protecting those jobs, and the universal service that the workers deliver, is vital, especially given that, according to Citizens Advice Scotland, more than 1 million Scots face surcharges or late delivery, or are refused delivery altogether, when they buy goods online. Will the Minister commit herself to protecting those Royal Mail jobs, and will she confirm that there will be a review of the regulation of parcel delivery prices to support our rural communities?

[Margot James]

The hon. Gentleman has made a good point. Royal Mail is regulated by Ofcom, which benefits everyone involved in the service. The universal postal service includes a parcel service. Companies must have regard to fairness in setting delivery charges, and any failure to be clear to customers before bookings breaches consumer protection law.

[Gill Furniss (Sheffield, Brightside and Hillsborough) (Lab)]

Today marks postal workers day, when we thank our posties for their hard work and determination in providing a key public service—not that the Conservatives will take any notice. In a privatised Royal Mail, we have seen 12,000 job losses and proposals to slash pensions by 45%. It is a classic case of “one rule for the rich and another for the rest”. Royal Mail has paid out £70 million in dividends to private shareholders, and that is only in the last six months. Does the Minister still stand by the Government’s decision to privatise Royal Mail?

[Margot James]

I stand by it 100%. Royal Mail would have had no future had it not been privatised.

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[Stephen Timms (East Ham) (Lab)]

5. When he plans to respond to the Taylor review of modern working practices.

[The Parliamentary Under-Secretary of State for Business, Energy and Industrial Strategy (Margot James)]

It is important that this much-needed report gets the consideration it deserves and that we take action where needed. In the industrial strategy, the Secretary of State took responsibility for improving quality of work in the UK and continued an important dialogue on this issue. We will publish our full response shortly.

[Stephen Timms]

The TUC reports that 3.2 million people are now in insecure work—an increase of more than a quarter over the past five years. Will the Minister accept Matthew Taylor’s recommendation, endorsed by the Select Committee, that a longer break in service—a month rather than a week, as at present—should be allowed before there is any loss of employment rights?

[Margot James]

That will be something that we consult on as we consult on the vast majority of the other proposals in the Taylor review. Taylor acknowledges the excellent track record of employment in terms of new jobs, but as the right hon. Gentleman rightly points out—and the TUC endorses this—there is an issue with insecure work and far too much risk being transferred to the employee.

[Mrs Maria Miller (Basingstoke) (Con)]

The Taylor review says that the same basic principles should apply to all forms of employment in the UK. Does my hon. Friend see paid time off for women attending antenatal appointments as a basic principle, and does she agree that, for health reasons, the law needs to clearly extend that principle to all female workers?

[Margot James]

I thank my right hon. Friend for her excellent question. We will review the matter that she raises in tandem with the rest of the review of Taylor’s recommendations, but she makes a very good point indeed.

[Jo Swinson (East Dunbartonshire) (LD)]

I welcomed last week the Government’s latest round of naming and shaming employers that have failed to pay the minimum wage—an area where state enforcement has actually had some success—so I urge the Minister to respond positively to the Taylor review’s recommendation that state enforcement of employment rights should be enhanced beyond just the minimum wage.

[Margot James]

We will consult on the remainder of the recommendations, particularly those relating to employment tribunals and the enforcement of awards that go unpaid.

[Theresa Villiers (Chipping Barnet) (Con)]

Insecure working practices at Uber enable the company to engage in a pricing policy that many of my constituents consider to be predatory and designed to drive out competition. What more can the Government do to improve working practices at Uber and ensure fairer competition between taxis and private hire vehicles?

[Margot James]

My right hon. Friend gets to the nub of many of the Taylor review’s recommendations. It is important that decent employment standards are maintained and that consumers are offered new opportunities, and we will be reviewing the proposals.

[Rebecca Long Bailey (Salford and Eccles) (Lab)]

Recent reports uncovered the fact that people driving on behalf of Amazon were forced to deliver up to 200 parcels a day while earning less than the minimum wage. With impossible schedules that left little to no time for breaks and no access to paid holidays or sick pay, many drivers experienced conditions that could be described as Dickensian. As yet another high-profile employment case emerges, why are the Government not taking robust action to crack down on bogus self-employment and to enforce employment rights?

[Margot James]

The hon. Lady puts her finger on precisely why the Prime Minister commissioned the Taylor review in the first place. When employers are indulging in practices such as those the hon. Lady outlines there will definitely be a deleterious effect on employees’ health, and they should be roundly condemned.

[Rebecca Long Bailey]

The Government keep hiding behind their forthcoming response to the Taylor review, but Sir David Metcalf, the Government’s director of labour market enforcement, stated this year that even the Government’s existing powers have not been used to protect workers, despite numerous official statements that the Government have taken abuse by employers seriously. Only last week, the Government identified 16,000 workers who were paid less than the minimum wage, and yet the Low Pay Commission believes that the true figure is between 300,000 and 580,000. Does the Minister agree with Sir David Metcalf that the Government’s enforcement of basic employment rights is wholly inadequate?

[Margot James]

I await the publication of Sir David’s strategy for dealing with labour market enforcement, which we expect to see in the first quarter of next year. I am pleased with his appointment, and he is doing a great job so far of bringing together the enforcement agencies at the Government’s disposal to ensure that they work even more effectively in the pursuit of non-compliance with the law.

[Colin Clark (Gordon) (Con)]

6. What estimate he has made of the potential carbon savings due to result from phasing out the use of unabated coal from electricity generation by 2025.

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[Stephen Hammond (Wimbledon) (Con)]

7. What steps he is taking to support growth in the small business sector.

[The Parliamentary Under-Secretary of State for Business, Energy and Industrial Strategy (Margot James)]

Through the industrial strategy we will drive over £20 billion of investment in innovative and high growth businesses. We will increase the national productivity investment fund to £31 billion. We are working to ensure that small and medium-sized enterprises win more public sector contracts to enjoy the benefits of that investment.

[Stephen Hammond]

My hon. Friend the Minister will know that many local authorities have reliefs, including small business relief, which they could use. Unfortunately, not all local authorities are using them. Will my hon. Friend say what the Government could do to encourage local authorities to use those reliefs so that all small businesses benefit?

[Margot James]

The Department for Communities and Local Government has issued clear advice to councils that will enable them to calculate the relief that is payable to businesses in the current year. I urge them to pay heed to that advice and implement it. My hon. Friend may be interested to know that Merton council has been allocated £459,000 of business rates discretionary relief in the current year.

[Paula Sherriff (Dewsbury) (Lab)]

Many small businesses are in catering and hospitality, and we of course wish them well, but when we leave a tip for staff we expect it to be paid to them, so when will the Minister publish the report on fair tips so that we can ensure that workers get paid properly?

[Margot James]

The hon. Lady rightly raises an important issue. Following the commissioning of the work on tipping, we have issued guidance and publicised the issue. What was happening was grossly unfair. I am glad to report that there has been a significant improvement since we commissioned the review.

[Julian Sturdy (York Outer) (Con)]

Unfair trading practices used by big retailers have been identified as a factor in limiting the growth of small and new businesses supplying to the groceries sector. Will the Minister therefore reassure me that the Department will be bringing forward proposals to widen the remit of the Groceries Code Adjudicator in its response to this year’s consultation?

[Margot James]

We will be publishing our response to this year’s consultation on the future of the Groceries Code Adjudicator early next year. I have already committed to meeting my hon. Friend to discuss this with the Minister for Agriculture, Fisheries and Food, my hon. Friend Member for Camborne and Redruth (George Eustice), and I look forward to that meeting.

[Drew Hendry (Inverness, Nairn, Badenoch and Strathspey) (SNP)]

Small business growth has been made more difficult due to the decision of the Royal Bank of Scotland to close 269 branches, which has been described as a “hammer blow” by the Federation of Small Businesses policy convenor in Scotland, who says that

“these changes will make it more difficult to run a business in much of Scotland”.

Will the Minister commit to working with the bank and her colleagues in the Treasury to ensure that the businesses and communities these branches serve are not left without the banking services they require?

[Margot James]

The hon. Gentleman raises a crucial point of concern to communities across the country. Although there is limited action the Government can take on how banks run their businesses, we have worked with the Post Office to enable it, through its 11,600 branches nationwide, to run a full complement of services

[Bill Esterson (Sefton Central) (Lab)]

Despite having the fifth biggest economy in the world—soon to be the sixth—the UK is ranked only 48th in the global enterprise league; 48th out of five really takes some doing. But this is not just about the lack of support for start-ups. Among small and medium-sized enterprises business confidence is falling and costs are rising, and, as the Bank of England’s figures show, access to finance is still at its lowest level since 2010. Do the Government have any excuse for their woeful failure to support our smallest businesses?

[Margot James]

The hon. Gentleman really should stop talking small businesses down, and he is absolutely wrong in his estimate. The UK is No. 4 in the world for being the best place to start a business, and the OECD figures show that we score highly on enterprise. He does raise a valid point about growth, and we need to improve our record in supporting small businesses to grow, which is precisely why the Chancellor has made available a vast amount of money in this year’s Budget to support the growth of small businesses.[Official Report, 8 January 2018, Vol. 634, c. 2MC.]

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[Mr Marcus Fysh (Yeovil) (Con)]

T3. Does the Minister agree that retaining full sovereign control of our regulation is essential to getting the most out of our economy, 88% of which does not relate to the EU?

[The Parliamentary Under-Secretary of State for Business, Energy and Industrial Strategy (Margot James)]

Sound regulation is crucial to businesses, workers and consumers. Approximately 1.4 million small and medium-sized enterprises export directly or indirectly to countries in the EU, and they will have a keen interest in the outcome of our trade negotiations.

[Jim Shannon (Strangford) (DUP)]

T7. Northern Ireland has people with very good basic digital skills, but a quarter of business owners in England lack confidence in their basic digital skills. What is the Department doing to provide help for smaller businesses to fill this skills gap on the UK mainland?

[Margot James]

We are working with the Department for Education, which is investing hugely in lifelong learning, skills and employability. We are prioritising the digital skills capability within that mission, which I am sure will be of great benefit to SMEs.

[Matt Warman (Boston and Skegness) (Con)]

T6. A recent report from Intel identified £2 trillion of global opportunities in artificial intelligence and driverless cars. Will the Minister outline what steps the Government are taking to invest in the skills that Britain will need to capitalise on that huge opportunity?

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[Preet Kaur Gill (Birmingham, Edgbaston) (Lab/Co-op)]

Given the time that has passed since the promise of an energy price cap, will the Secretary of State confirm that he remains committed to implementing the cap for 17 million households, and will he outline the process by which the Conservative party is expected to introduce it?

[Margot James]

We have published an important Bill, and we have requested Ofgem to develop proposals as we progress with it. The Business, Energy and Industrial Strategy Committee is scrutinising our draft legislation, which we intend to bring to the House at the earliest opportunity.

[Martin Vickers (Cleethorpes) (Con)]

Last week I was pleased to welcome a delegation from Taiwan to my constituency to meet businesses in the offshore renewables sector, and the delegation regarded the way the sector has developed in the UK as a model. Will the Minister outline what support is available to small and medium-sized businesses involved in the supply chain in this country that want to extend to countries abroad?

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[Jim McMahon (Oldham West and Royton) (Lab/Co-op)]

Access to finance is critical for small businesses, but the protection in place when things go wrong is non-existent. Do the Government agree, and will they look at extending the role and remit of the Financial Conduct Authority in that regard?

[Margot James]

I am meeting the chief executive of the FCA before Christmas, and I will be raising the issue of unregulated small business lending, which the hon. Gentleman mentions.

[Craig Tracey (North Warwickshire) (Con)]

Does the Secretary of State agree that the key to a successful industrial strategy is that it focuses on all areas of the UK, obviously including North Warwickshire and Bedworth?

[Rachael Maskell (York Central) (Lab/Co-op)]

On 8 March, the Chancellor announced a full review of business rates. On 14 March, the Minister responsible for small business said:

“The review will report in due course and in the not-too-distant future.”—[Official Report, 14 March 2017; Vol. 623, c. 178.]

Yet the industrial strategy barely mentions business rates, which are having a massive impact on businesses in York. When will this review start?

[Margot James]

The Chancellor has announced considerable business rate relief for small businesses, including making small business rate relief permanent, retrospective redress for SMEs caught by the staircase tax ruling, and more besides.